Why are the Warriors, Wizards, and 76ers investing millions in a Video Game?

Early Monday morning ESPN broke the news that the Philadelphia 76ers were set to become the first North American professional sports team to own an esports team with the double purchase of both Team Dignitas and Team Apex. Less than 24 hours later, Peter Guber, co-owner of the Golden State Warriors, and Ted Leonsis, owner of the Washington Wizards and Capitals announced they would become the new owners of Team Liquid, an organization which currently employs over 50 players, spanning 10 separate games. What caused this sudden push for NBA owners to venture into the digital world of gaming? To look at that, let’s break down what brought us to this point.

 

League of Legends, or LoL as it is commonly abbreviated, is the first and only video game released by Riot Games, an American video game developer based in Los Angeles, California. The game was released in late 2009, to general success, however the popularity of the game has only grown since then. As of September 2016, Riot Games estimates that over 100 million unique users play League of Legends every month, making it easily the most played video game in the world. To put that number into perspective, 100 million unique users means that approximately 1.4% of the entire world logs in and plays at least one game, each and every month.

 

Due to the competitive nature of the game, Riot Games was quick to organize the first World Championship, which was held at DreamHack, an already established digital festival, in Sweden during the month of June, 2011. The event had over $100,000USD in prizes, with $50,000USD going to the eventual champions, the European team, Fnatic. Fast forward less than five years, and the game had spread globally. The 2015 World Championship, held in Berlin, Germany, was the largest the game had ever seen, with over 34 million unique users who tuned in to watch the event, which was being broadcast for free online. The event held an average concurrent viewership of over 4.2 million viewers at any given time, and reached a peak viewership of over 14 million people watching as perennial Korean powerhouse, SK Telecom T1, took down their fellow Korean rivals, the ROX Tigers, to become the first ever two-time World Champion.

 

So why did the Philadelphia 76ers just spend millions of dollars to purchase a team which has yet to make a single World Championship? Well, in the words of 76ers CEO Scott O’Neil, “We like to be agents of change, rather than sit and watch from the sidelines. There’s no denying the fact that esports presents corporate America with a way to reach millennials in a way stick and ball sports just isn’t.”

 

The now owners of Team Liquid feel the same way. “Ted and I are in the audience business,” Guber stated in an interview with ESPN Senior Writer, Darren Rovell “and what we saw was a huge audience in the amount of people that were watching esports, playing esports and buying the accoutrements. It wasn’t too difficult to realize that this was a real opportunity.”

 

In May, German soccer team FC Schalke 04 bought a League of Legends spot in the European Championship Series. Former NBA player Rick Fox created his own brand, titled Echo Fox, and has spread from League of Legends, to now 6 different esports ventures. Sacramento Kings minority partners Andy Miller, Mark Mastrov and Shaquille O’Neal, along with Alex Rodriguez and Jimmy Rollins, are partners in NRG eSports, which competes in more than five disciplines.

 

Sports teams are far from the only corporate investments in eSports however. Team SoloMid, widely regarded as the most popular North American League of Legends team, and one of the most supported eSports brands as a whole, receives sponsorship from companies such as Logitech, HTC, Red Bull, and Geico to name a few.

 

Competitive gaming is not only surviving, but it is thriving in this ever growing digital age, and while it may seem new to some, Peter Guber put it best when he says “The truth is, it’s not even that early in the life cycle. Not only is the horse out of the barn here, eSports is running in the Kentucky Derby.”

League of Legends however isn’t just any old horse. It’s American Pharaoh.

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One Comment

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  1. Great article Mak! You have a wonderful voice and bring up a lot of interesting changes that are happening to our economy in this article. Though I am not very knowledgeable of esports (or real sports), you made it very easy to understand the topic of which you discussing here. It’s crazy to think that since the invention of the Internet and the vast advances in technology since then, that most of our consumption is done virtually. Instead of board games, movie tickets, and other physical activities, we buy online games. Thus creating a whole new way to profit! Companies that produce these games, like Lol, are winning big here! I’d say, you’ve got it right! It looks like the 76er’s have made a great investment. Thanks for the the intriguing article.

    Liked by 2 people

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